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The Oil PSUstrike : other side of the story
— A. Krishnatreya
During the recent strike by the Oil PSU employees, which badly hit the
country's economy and brought life to a grinding halt in many cities,
it was natural for the people to censure the striking employees in the
toughest words. This is because of the general perception that oil
sector PSUs like ONGC, IOC , GAIL etc are already very highly paid and
any further demand for better pay is unjustified. The media left no
stone unturned in proving that the striking employees are getting much
more than their due and the only way to address their grievances is to
suspend them or take strict measures. Yes, it is true that a strike
which can cripple the Indian economy is not justified , but why did
such a strike have to take place at all? Has anyone presented the
other side of the story?

The concept of the Public Sector Unit was visualised by some of our
great leaders like Jawaharlal Nehru and Sardar Patel, to make the
country self sufficient in certain key sectors like oil, coal and
steel. The initial days were tough, when these new units, still in
their infancy had to take on the global giants like Shell and Chevron
. But as time passed and people gained experience, the experiment
proved to be a success and many of the PSUs started making their
presence felt not only in the country but also in global business. One
among them is ONGC , which started off as a branch under the
geological survey of India and in 50 years established itself as
India's most valuable company with assets in 16 countries. Did this
happen out of the blue? Certainly not. It happened because of the
consistent efforts by a group of highly qualified and dedicated
engineers, geologists and executives. But after the collapse of the
permit raj and the opening up of the Indian economy, private players
came into the picture and the easiest way for them to hire quality
manpower was to poach from the State run PSU s which already had a
pool of well qualified and dedicated workforce. And this was quite an
easy task , because the salary they offered was at least 5-6 times
what a PSU employee was paid.

It is a common misconception that OIL PSU employees are overpaid for
the job they do .... almost everyone seems to support this idea. But
what they forget is that the OIL PSU officers are drawn from the cream
of the engineering and science graduates. The entry criteria are very
strict and the national level written tests needed to qualify can be
compared to the civil services examinations. Moreover, officers
employed through campus placements are also drawn from only the very
best institutes. And where do these officers work? Well, the oil
sector is a cruel world where there are hardly any white collared
jobs, except perhaps at the top management level. So most of them work
in fields located at remote areas or hundreds of Miles in the sea.
Life is tough and every drop of oil is produced through the sweat of
the engineers, quite literally. And at the end of the day how much are
they paid? If we compare the gross annual emoluments of the Chairman
and Managing Director (CMD) of ONGC and that of L&T the results are
startling! The ONGC CMD gets around Rs 13 lakh an annum whereas the
top boss of L&T gets a staggering Rs. 5.85 crore. If this is the
discrepancy at the top level , we can well guess what the situation is
like at the lower or middle management level. On an average a private
sector oil employee gets at least 5-6 times more than his PSU
counterpart. And that too when many a time he is lesser qualified and
poorly trained. No wonder that the attrition levels of the Oil PSU s
are at a record high.

Another myth among the people is that PSU employees are casual about
their work and unlike their private counterparts have little or no
responsibility. It is very wrong to equate an Oil PSU employee with a
government employee. A PSU employee may have a secure job, but he is
certainly accountable for it and many of his variable remunerations
are performance based. Targets are set and achieved in record time. Is
this possible without hard work? The professional competence of PSU
officers have been amply demonstrated in many instances. A glaring
example is MRPL, the refinery set up by the AV Birla group as a joint
venture in the mid nineties. The refinery was so badly managed that it
seldom came into full production of 7MMTPA besides going into huge
losses. Finally, unable to manage it, The AV Birla group sold off its
stake to ONGC and in six months the debt of the refinery was reduced
from Rs 5500 crore to Rs 188 crore and in less than 2 years the
company started giving profits. At present , MRPL is not only
producing at full capacity and earning huge profits but there are
plans to increase its producing capacity. Does this not speak of the
competence of Public sector Oil companies?

It is often said that privatising is the only sane option left for the
Oil PSUs. But what people fail to see is that many of these PSUs are
doing much better than their private counterparts. ONGC, for example,
is India's biggest Integrated Oil and Gas company. Till recently it
had the largest market capitalisation (recently overtaken by Reliance)
and is India's most valuable corporate. For the financial year
2007-08, it had a net profit of Rs 19872 crore and paid a dividend of
Rs 6844 crore to the Indian government (the highest by any corporate).
Not just that, it also shared a subsidy burden of Rs 38500 crore of
the downstream oil companies like IOC and BPCL so that the common man
can keep buying petrol and diesel at highly subsidised rates. Private
players like Reliance stopped selling petrol from their outlets simply
because they were not prepared to bear the subsidy burden and so kept
their prices high. The contentious issue of the pay commission report
tabled by the Justice M.J.Rao committee has to be carefully looked
into. It has to be borne in mind that unlike government employees who
get central DA , the Oil PSU employees get a variable industrial DA
which is substantiaIly. Lowen. Moreover, a government employee gets a
pension which amounts to 50% of the last salary drawn, whereas a - PSU
employee doesn't have any such scheme. Besides, most of the engineers
working in the fields have to work on shifts of 12 hours and in
environments which are termed as hazardous whereas all government
employees have a maximum 8 hour work per day in safe and secure work
environments. So where does the parity between government and Oil PSUs
come from? Finally, it needs to be remembered that the burden of
paying the revised salary to the employees is to be borne by the PSUs
, without any contribution from the government's side. So why does it
not have the independence to fix the pay of its own employees and have
to be governed by the government pay commissions? It has been
necessary to put all this on record because of the consistent manner
in which oil PSUs have been maligned both by the government and the
media over a strike which was necessitated by factors created solely
by the government itself.

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